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Eclipse Aviation seeks court approval for restructuring under 363 sale procedures and debtor in possession financing

Eclipse Aviation(r), manufacturer of the world's first very light jet (VLJ), announced today that it is seeking court approval for debtor-in-possession (DIP) financing and procedures for the sale of substantially all of its assets under Section 363 of the U.S. Bankruptcy Code. The proposed sale will enable the business to continue as an industry leader in the manufacture and sale of VLJs with lower costs and reduced debt liabilities.

Eclipse filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware this morning, simultaneously announcing an agreement for the sale of its assets for a combination of cash, equity and debt to an affiliate of ETIRC Aviation S.a.r.l., Luxembourg, subject to higher and better offers. ETIRC Aviation, a principal driver of the VLJ industry in Europe, is currently Eclipse's largest shareholder. ETIRC Aviation's Chairman Roel Pieper has been the acting CEO of Eclipse since July 2008 and has served as Eclipse's Chairman since January 2008. The proposed sale is subject to competitive bidding through a public auction, which is expected to be completed and a sale finalized in January 2009.

"In the face of unprecedented economic challenges, it is clear that the sale of the Eclipse business through the Chapter 11 process is the right course of action to maximize the value of the business, secure its future and protect the best interests of Eclipse's stakeholders, including customers, suppliers, employees and creditors," said Roel Pieper, CEO of Eclipse Aviation. "The successful sale will position the business for aggressive global expansion, allowing the company to fulfill its promise and solidify its position as the world's leading manufacturer of VLJs."

Also announced today, a group of existing Eclipse shareholders and note holders will provide Eclipse with post-petition, debtor-in-possession (DIP) financing. This financing will provide Eclipse with sufficient resources to continue normal business operations through the closing of the sale. Eclipse has filed a motion with the Court to approve the financing with a request for an expedited hearing to avoid business interruption. Once approved, this financing along with other relief requested from the Court, will position Eclipse to pay wages and salaries, honor employee benefits, service customer aircraft and continue manufacturing operations throughout the sale period.

New York-based Greenhill & Co., Inc., a leading independent investment bank with proven expertise in mergers, acquisitions and restructurings, has been retained as financial advisor to Eclipse Aviation. Inquiries into the Eclipse Aviation sale process can be directed to Brad Robins, Greenhill & Co., Inc. at 212-389-1567 or brobins@greenhill.com.

Press release issued by on November 25, 2008


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